DGAP-News: E.ON SE: 2013 E.ON Annual Shareholders Meeting: building the new E.ON
(firmenpresse) - DGAP-News: E.ON SE / Key word(s): AGM/EGM
E.ON SE: 2013 E.ON Annual Shareholders Meeting: building the new E.ON
03.05.2013 / 10:15
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2013 E.ON Annual Shareholders Meeting: building the new E.ON
- Successful entry into new markets
- Renewables, E&P, and Russia delivering robust growth
- Shareholders vote to pay out EUR1.10 per share dividend
- 2013 forecast confirmed: EBITDA expected to be between EUR9.2 and 9.8
billion, underlying net income between EUR2.2 and EUR2.6 billion
'We're on a path from being a traditional integrated utility toward
becoming a developer of customer-centric energy solutions. This is our
objective and mindset as we enter new markets and regions.' This was CEO
Johannes Teyssen's overview of E.ON SE's transformation as he spoke at the
company's Annual Shareholders Meeting in Essen.
Teyssen reminded the several thousand shareholders in attendance of the
strategy the company had announced in 2010, which he said had proven to be
the right one, even in a harsher business environment. E.ON is implementing
the strategy swiftly and on schedule. As part of its effort to focus on
businesses and markets that are viable for the future, since 2010 E.ON has
reached agreements to sell assets worth more than EUR17 billion and is
currently aiming for EUR20 billion. At the same time, E.ON is
systematically expanding its new growth businesses. In the last three years
E.ON has commissioned 26 onshore and 2 offshore wind farms in North America
and Europe. Together with its existing portfolio, these additions rank E.ON
among the global market leaders in offshore wind. E.ON is currently
commissioning the world's largest offshore wind farm in the outer Thames
estuary, installing turbines at Karehamn offshore wind farm in Sweden, and
beginning installation work at Amrumbank wind farm in the German North Sea.
E.ON has also established a broad and strong platform in distributed energy
solutions. In the last three years it has installed numerous micro
generating units for residential and business customers and is Germany's
market leader in combined-heat-and-power (CHP) units for commercial and
industrial customers. Recently founded E.ON Connecting Energies, which
specializes in CHP solutions for international customers with multiple
sites, has concluded its first contracts.
In expanding its business outside Europe, E.ON will aim for 'smart,
responsible growth that combines ambitiousness and prudence,' Teyssen said.
E.ON entered the Brazilian and Turkish markets in 2012 by joining forces
with strong local partners. Enerjisa, E.ON's joint venture with Turkey's
Sabanci Holding, recently made successful bids for two regional utilities
in a government auction to privatize the country's power networks,
achieving an early milestone toward reaching its ambitious growth targets
in Turkey's energy market. When the privatization process in both regions
is complete, Enerjisa will have 9 million customers; it aims to have 7.5
gigawatts of generating capacity in operation by 2020. E.ON and EBX of
Brazil agreed to expand their strategic partnership. The generation
projects the two companies are developing jointly will deliver earnings
streams starting in the second half of this decade. The first jointly
developed asset is scheduled to enter service this autumn.
E.ON began in the middle of the previous decadeto lay the foundation for
entering new businesses and regions, Teyssen emphasized, adding that E.ON's
businesses in renewables and Russia have developed so well in recent years
that they are generating nearly EUR1 billion in earnings. E.ON's
exploration and production business will easily surpass this threshold this
year. 'Now is the right time to build on these new sources of earnings to
create growth potential for the second half of this decade' Teyssen said,
adding that this will require resolute cost discipline.
E.ON 2.0, the company's efficiency-enhancement program, has already
delivered tangible cost reductions. More than 50 subprojects consisting of
numerous individual measures have been initiated or already implemented.
E.ON has established a leaner organizational setup in its energy trading
business and other areas, eliminated intermediate levels of management in
Munich and elsewhere, and set up new entities for procurement and business
services. These measures have significantly reduced bureaucracy across the
company. E.ON already trimmed its costs by EUR200 million in 2012 and
expects to cut another EUR800 million this year. 'Cutting costs and
bureaucracy isn't an end in itself but rather an indispensable prerequisite
for the successful implementation of our strategy,' Teyssen said.
'We can point to important successes and milestones as we transform our
company,' Teyssen said, even though these achievements are not yet
adequately reflected in E.ON's stock price. But discussions with investors
have shown that this is not a result of doubts about the company's strategy
or a lack of success in implementing it but rather is a consequence of the
radical changes in Europe's traditional power generation and wholesale
energy businesses. 'From their high point in 2009, wholesale power prices
have fallen by 50 percent,' Teyssen said. 'In many European markets, even
the margins of state-of-the-art gas-fired power plants are close to zero.
Conventional power generation-one of our company's biggest core
businesses-is under enormous pressure.'
E.ON had announced that it would restore the profitability of its
generation fleet and consider shutting down unprofitable assets. The
company was able to avert the impending shutdown of its most
technologically advanced gas-fired generating units, which are located at
Irsching power station in Bavaria, by reaching an agreement with the
Federal Network Agency and the local network operator. Effective
immediately, the agreement ensures that E.ON receives acceptable
compensation for its fixed costs. Nevertheless, in the current
circumstances E.ON believes that a new market design is necessary, one that
provides acceptable compensation for maintaining technologically advanced,
climate-friendly generating capacity.
Teyssen stated E.ON's clear support for the transformation of Germany's
energy system but also called for a paradigm shift: 'In Germany we're still
too fixated on megawatts.' The country, he said, is installing wind turbine
after wind turbine and solar panel after solar panel in the belief that by
doing so it has already transformed its energy system. But simply using
different technologies to produce energy is not enough. The traditional
distinction between generation, transmission, distribution, and consumption
is dissolving. New, smart grids are emerging in which energy flows in all
directions. The focal point of these grids isn't the traditional energy
utility but rather the customer. Customers can now choose whether they want
to buy energy from the grid or make it themselves and perhaps even market
it to others. 'E.ON is part of this transformation,' Teyssen said. 'This
process will lead to the creation of a new E.ON that has greater earnings
strength and that will create new and lasting value for its shareholders.'
Teyssen also talked to shareholders about the company's 2012 results and
dividend. In 2012 E.ON increased its operating earnings by EUR1.5 billion,
its underlying net income by EUR1.7 billion, and its operating cash flow by
fully EUR2.2 billion. The key factor was a significant improvement in the
company's wholesale gas business following the renegotiation of supply
contracts with gas producers and the retroactive recovery of losses
recorded in the gas business in prior years. In addition, 2011 earnings had
been adversely affected by non-recurring items relating to Germany's
accelerated phaseout of nuclear energy. Earnings were also positively
impacted by additional generating capacity in Russia and the first
permanent cost reductions from E.ON's ongoing efficiency-enhancement
program. Negative factors included stoppages in oil and gas pro-duction,
Germany's nuclear-fuel tax, and other new taxes in countries such as
Sweden, Italy, Spain, and Hungary. In addition, energy demand fell further
across Europe, and E.ON's earnings were also adversely affected by
contradictory regulatory requirements and the continued explosive growth of
government-subsidized power production. In view of its significantly
improved overall results, however, E.ON will pay a dividend of EUR1.10 per
share, which represents an increase from the prior year. All together, E.ON
will pay out to shareholders about 50 percent of its underlying net income.
Teyssen confirmed E.ON's 2013 earnings forecast, which had been revised in
January. For the current year E.ON expects to record EBITDA of EUR9.2 to
EUR9.8 billion and underlying net income of EUR2.2 to EUR2.6 billion. A
significant portion of the decline-about EUR1 billion-represents the loss
of earnings streams from divested businesses.
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This press release may contain forward-looking statements based on current
assumptions and forecasts made by E.ON Group management and other
information currently available to E.ON. Various known and unknown risks,
uncertainties and other factors could lead to material differences between
the actual future results, financial situation, development or performance
of the company and the estimates given here. E.ON SE does not intend, and
does not assume any liability whatsoever, to update these forward-looking
statements or to conform them to future events or developments.
End of Corporate News
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Language: English
Company: E.ON SE
E.ON-Platz 1
40479 Düsseldorf
Germany
Phone: +49 (0)211 4579-0
Fax: +49 (0)211 45 79-5 01
E-mail: investorrelations(at)eon.com
Internet: www.eon.com
ISIN: DE000ENAG999
WKN: ENAG99
Indices: DAX, EURO STOXX 50
Listed: Regulierter Markt in Berlin, Düsseldorf, Frankfurt (Prime
Standard), Hamburg, Hannover, München, Stuttgart;
Terminbörse EUREX; Mailand
End of News DGAP News-Service
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